What Prompted Airline Deregulation 20 Years Ago? What Were the Objectives of That Deregulation and How Were They Achieved?
What happened in 1978 was that the public-utility type of passenger airline economic regulation was eliminated almost entirely, albeit phased out over time. The freedom to raise and lower fares and to enter and leave markets met the first three objectives that I have described-pricing flexibility and ease of industry and market entry. The transfer of the few remaining CAB regulatory authorities to DOT met objectives four and five-regulatory delays and authority to immunize anticompetitive agreements (though I confess I think the DOT then went too far too fast in blessing airline mergers).